Crypto Times Logo Black
Google News Follow Banner
  • News
    • Market
    • Bitcoin
    • Ethereum
    • Altcoins
    • Regulations & Policies
    • Price Analysis
    • DeFi News
    • Blockchain News
    • Industry
  • Exclusive
    ExclusiveShow More
    Grand Theft Auto VI artwork featuring Jason and Lucia behind Bitcoin, Ethereum, and Solana coins.
    GTA 6 Trailer Launched: Is Rockstar Bringing Crypto Into the Game?
    HEX founder Richard Heart wearing a gold patterned Versace hoodie during an interview
    Who Is Richard Heart? From HEX Crypto Millions to Istanbul Detention
    Gold Bitcoin coin with a CPI U.S. Inflation chart and Federal Reserve building
    US CPI Data: Inflation May Hit 3.7%, What to Expect for Bitcoin?
    Cracked Ledger hardware crypto wallet with exposed circuit boar
    Ledger CryptoBilis Hack Explained: $93M Stolen, Wallets Tampered
    Hunter Biden’s $LAPTOP Post-Mortem: What Went Wrong With the Token Launch
  • Opinion
    OpinionShow More
    Donald Trump speaking at a presidential podium with the White House and U.S. Capitol building in the background.
    Trump Just Declared the Super Intelligence Era in the “Unites States.” So Who Controls It?
    Comparison of Bybit 12-hour, Bitget 85-hour, and WazirX 463-day response timers
    Bitget, Bybit Paid in Hours; WazirX Lost Least in Hacks at $235M, Held Users Hostage for 463 Days
    Jackson Hole 2026: Crypto Is No Longer Outside the Fed’s Door
    Jackson Hole 2026: Crypto Is No Longer Outside the Fed’s Door
    The Architecture of Trust Same Routes, New Risks in Global Tokenisation
    The Architecture of Trust: Same Routes, New Risks in Global Tokenisation
    The Architecture of Trust What 4,000 Years of Trade Teach Us About RWA Tokenisation
    The Architecture of Trust: What 4,000 Years of Trade Teach Us About RWA Tokenisation
  • Learn
    • Explained
    • How To
    • Insights
  • IndicesNew
    • India USDT Premium Index
    • India USDC Premium Index
  • Videos
  • More
    • About Us
    • Our Authors
    • Contact Us
    • Editorial Policy
    • Daily Crypto Puzzles
The Crypto TimesThe Crypto Times
  • All News
  • Market
  • Bitcoin
  • Ethereum
  • Altcoins
  • Regulations & Policies
  • Blockchain
  • DeFi
  • Industry
  • Exclusive
  • Opinion
Search
  • News
    • Market
    • Bitcoin
    • Ethereum
    • Altcoins
    • Regulations & Policies
    • Price Analysis
    • Blockchain
    • DeFi
    • Industry
    • Exclusive
    • Opinion
  • Learn
    • Explained
    • How To
    • Insights
  • IndicesNew
    • India USDT Premium Index
    • India USDC Premium Index
  • Quick Links
    • About Us
    • Our Authors
    • Contact Us
    • Editorial Policy
    • AI Policy
    • Sponsored & Advertorial Policy
    • Daily Crypto Puzzles
  • Videos
  • Glossary
Follow US
© 2026 By Crypto Times. All Rights Reserved.
Bitcoin News

Lightning Labs Proposes LayerTree to Scale Bitcoin Ownership Without Custodians

A non-custodial design that lets users exit a shared Bitcoin output in a single transaction while connecting directly to the Lightning Network.

Written By Gopal Solanky
Edited by Divya Mistry
Published 59 minutes ago·Updated 45 minutes ago
Make The Crypto Times preferred on GoogleGoogle
Lightning Labs corporate logo on a blue and purple gradient background

Lightning Labs has introduced LayerTree, a proposed non-custodial scaling construction that allows a large number of users to share a single Bitcoin unspent transaction output (UTXO). 

Announced on October 15, 2026, via the company’s official X account, the design uses covenants and an off-chain Merkle-sum tree so that one on-chain output can represent balances for up to a million participants. Any user can leave at any time in a single transaction, recipients do not need to remain online, and funds carry no forced expiry. 

AI Summary
Show
LayerTree uses covenants and an off-chain Merkle‑sum tree to represent up to 1 million balances in one UTXO.
Exiting a depth‑20 tree (1 M users) costs about 1,150 virtual bytes, a single transaction regardless of membership size.
Operators cannot block exits; joins require operator signature, while leaves can serve as Lightning channel anchors for offline payments.

The proposal is detailed in a technical paper authored by Lightning Labs CTO Olaoluwa Osuntokun.

How LayerTree Enables Constant-Size Exits from Shared Bitcoin Outputs

Bitcoin’s fundamental constraint for widespread ownership is the scarcity of UTXOs: each distinct owner typically requires a separate output, and those outputs consume block space and raise fees. LayerTree addresses this by keeping the ownership record entirely off-chain. Each participant’s balance, keys, and optional lease appear as a leaf in a binary Merkle-sum tree; internal nodes store both a hash of their children and the summed value. 

The single on-chain output commits only to the tree’s root. When the output is spent, a covenant script verifies a Merkle proof of the current root, applies a permitted transition (such as an exit or join), and requires the spending transaction to recreate the same output under the correctly updated root. Because the tree itself never becomes a chain of on-chain transactions, an individual exit remains one transaction whose size grows only with the depth of the tree rather than with the total number of members.

According to measurements published with the design, a unilateral exit from a depth-16 tree (65,536 slots) costs roughly 1,020 virtual bytes under the fuller set of proposed opcodes—about nine times a simple single-owner spend but substantially less than the approximately 2,511 virtual bytes required for a comparable exit in an Ark-style tree of pre-signed transactions. With an additional purpose-built Merkle-sum opcode (not yet proposed), the same exit falls to around 540 virtual bytes and grows by only about 10 virtual bytes each time membership doubles. 

The operator who maintains the tree cannot seize balances or block exits; the covenant and the owner’s signature on the exit transaction enforce the rules. Joining remains under the operator’s signature, so admission is not guaranteed, but once inside, a user can leave without further permission or a waiting period. 

Batch joins of roughly 1,000 participants can reduce the on-chain cost to less than one virtual byte per person. These properties distinguish LayerTree from constructions that require a path of transactions or that force the entire structure on-chain when a single participant becomes unresponsive.

Integrating with the Lightning Network for Offline Receives and Payments

LayerTree is explicitly designed to compose with the Lightning Network, Bitcoin’s primary off-chain payment layer. The Lightning Network enables near-instant, low-fee transfers by moving most activity into bidirectional payment channels that ultimately settle on the base chain only when necessary. 

LayerTree treats certain leaves as channel anchors, so a Lightning hub can host many channels inside one shared output rather than one output per channel. Users can receive payments into a funded “credit” leaf via Lightning without staying online; a voucher mechanism allows an issuer to pre-authorize incremental updates that anyone can later redeem, so repeated incoming payments incur no per-payment on-chain cost. Internal transfers within the tree, including those that move value between Lightning channels and ordinary leaves, can likewise remain off-chain until an exit occurs.

This composition addresses a practical limitation of pure channel-based systems: the need for recipients to monitor the chain or rely on watchtowers to prevent counterparties from broadcasting outdated states. Because LayerTree exits carry no timelock and the shared output itself never expires, a user who receives funds through Lightning can later claim them unilaterally even after prolonged inactivity. 

Real-world Lightning adoption has already expanded through merchant integrations and remittance corridors; Square’s Lightning-powered checkout, for example, has brought instant Bitcoin acceptance to millions of U.S. sellers, while services such as Chipper Cash have shifted a substantial share of transactions onto Lightning in emerging markets. 

LayerTree aims to supply the underlying ownership layer that lets such payment networks scale to far larger user sets without a corresponding explosion in on-chain outputs. Osuntokun’s paper notes that a hub sized by exit throughput, rather than by the number of channels, can occupy a single output, potentially lowering the capital and operational requirements for large Lightning operators.

Opcode Dependencies and Path Toward Broader Bitcoin Adoption

None of the LayerTree transitions run on Bitcoin today. The design compiles to four tiers of already-proposed opcodes, ranging from a minimal set that includes OP_CAT and a point-tweak operation up to the fuller “Great Script Restoration” package together with transaction introspection (OP_TX), OP_CHECKSIGFROMSTACK, and elliptic-curve opcodes. 

The specification states that LayerTree introduces no new opcodes of its own; it composes candidates already under discussion. Until those soft-fork changes activate, the construction remains a research and implementation prototype, complete with a Go reference implementation, test vectors, a Lean 4 formalization of the core conservation and exit properties, and measured script sizes.

The proposal arrives amid ongoing work on other Bitcoin scaling approaches, including timeout trees, channel factories, and Ark-style systems. LayerTree’s distinguishing claim is that the cost of sharing is paid primarily at exit rather than at every state update or at forced expiry, and that the exit itself stays a single transaction. 

For a tree of one million members (depth 20), the paper and site materials place a solo exit at roughly 1,150 virtual bytes under current opcode assumptions—still one transaction and without a mandatory refresh period. Whether this efficiency is sufficient for mass adoption will depend on fee markets, the eventual activation of the required script capabilities, and the practical willingness of operators to run large trees. The design does not promise free entry or eliminate all coordination; an operator can refuse joins, and grafted subtrees must be verified by participants to avoid empty commitments. 

At the same time, the absence of forced timeouts and the ability to receive without remaining online remove two common friction points for long-term holders and for users who interact with Bitcoin primarily through Lightning.

By publishing the full specification, formal arguments, and cost models alongside the announcement, Lightning Labs has placed a concrete, measurable proposal into the public discussion of how Bitcoin can support ownership at population scale while remaining non-custodial and interoperable with existing payment channels. 

The next steps will be community review of the scripts and security arguments, further measurement against alternative designs, and, ultimately, decisions by Bitcoin node operators and miners about whether the underlying opcode proposals should proceed. Until then, LayerTree exists as a detailed blueprint rather than a live network feature, illustrating one path by which a single on-chain output might eventually serve as the settlement anchor for millions of independent balances. 

Also read: This Indicator Puts Bitcoin Price at $251K by 2030, $2.2M by 2040

Disclaimer: The information researched and reported by The Crypto Times is for informational purposes only and is not a substitute for professional financial advice. Investing in crypto assets involves significant risk due to market volatility. Always Do Your Own Research (DYOR) and consult with a qualified Financial Advisor before making any investment decisions.

Follow The Crypto Times on Google News to Stay Updated!      Google News

Daily Crypto Puzzles
Tickerdle Tickerdle Crypto Connections Crypto Connections Crypto Crossword Crypto Crossword
TAGGED:Cryptocurrency
Share This Article
Whatsapp Whatsapp LinkedIn Telegram Copy Link

Daily Crypto Puzzles

Tickerdle crypto game Tickerdle Crypto Connections game Crypto Connections Crypto Crossword game Crypto Crossword

Latest News

Portrait of OKX Global Managing Partner and CMO Haider Rafique
OKX Global Managing Partner Haider Rafique Plans Exit by End of 2026
Does Google’s Quantum Research Put Bitcoin at Risk What Willow Really Means
Does Google’s Quantum Research Put Bitcoin at Risk? What Willow Really Means
Arbitrum and WisdomTree corporate logos on square tiles
Arbitrum Hits 97% Gross Margin as Revenue Stream Expands
Indian Enforcement Directorate (ED) PMLA complaint file next to a Bitcoin coin
ED Files PMLA Complaint in India’s ₹2.95 Cr Digital Arrest Scam Laundered via Crypto
Fed Chair Warsh Offers No October Rate Signal, Warns AI Boom May Fuel Inflation
Fed Chair Warsh Gives No October Rate Signal, Warns AI Boom May Fuel Inflation

Find Us on Socials

You may also like

Smartphone displaying the Strive corporate logo

Strive Raises SATS IPO to $630M as It Targets More Bitcoin Purchases

Saylor’s Strategy & Japan’s Metaplanet Face MSCI Index Removal Under New Bitcoin Treasury Rules

Saylor’s Strategy & Japan’s Metaplanet Face MSCI Index Removal Under New Bitcoin Treasury Rules

Grand Theft Auto VI artwork featuring Jason and Lucia behind Bitcoin, Ethereum, and Solana coins.

GTA 6 Trailer Launched: Is Rockstar Bringing Crypto Into the Game?

Physical gold Bitcoin coin and silver Ethereum coin placed side by side.

Bitcoin, Ethereum Recover as US PPI Jumps and Liquidations Hit $937M

The Crypto Times Logo PNG

News

All News
Market News
Bitcoin News
Ethereum News
Altcoin News
Regulations & Policies
DeFi News
Blockchain News
Industry News

Sections

Exclusive
Opinions
Learn
Insights
Videos
Glossary

India Premium Indices

Stablecoins
USDT
USDC

Play

Daily Crypto Puzzles
Tickerdle
Crypto Connections
Crypto Crossword

Company

About Us
Our Authors
Masthead
Editorial Policy
AI Policy
Advertorial Policy
Contact Us
Career

Follow Us

X-twitter Linkedin Telegram Youtube Instagram
© 2026 The Crypto Times | Protocols And Tokens Pvt Ltd.
DMCA.com Protection Status
  • Terms and Conditions
  • Disclaimer
  • Privacy Policy
  • Cookie policy
Do Not Sell or Share My Personal Information